The Most Common Credit Card Mistakes You Should Stop Making Today

I t’s an absolute pleasure to not worry about cash! The innovation and progression of credit cards have made transactions, and frankly life too, more convenient, quicker, and on the go. These magical cards save us from losing cash, trips to the ATM and so much more! But we often make some common credit card mistakes that can damage our spending or credit, and hinder this magical process.

Whilst credit cards are a gift of the 21^st century that we all make use of and very much appreciate, let’s not forget the bill that is due at the end of each month. We may conveniently spend the month and shop as we go, the arrival of the bill and the balance of payment due gives us all a mini heart attack that we too quickly get over by paying the minimum payment due to keep our credit card active and alive. But did you know that this is one of the most common credit card mistakes you should never make? I agree it happens to each one of us. So, today we thought to list down the common credit card mistakes that we should be mindful of and try to make less of. Without further ado, let’s see the mistakes we might already be making and shouldn’t:

Stop Making Minimum Payments!

It’s 2021 and we’re making big changes! Did you know that making the small minimum payment against your complete bill will actually cost you more than save you money? It will definitely buy you more time but will also increase the interest on your balance hence making your original bill much higher. Small payments, which your dearest bank is expecting you to make, will hardly make a dent in your total bill due and it’s not doing you any favors.

This one is really the one common credit card mistake you should never make. So, let’s nip this one in the bud and we mean for real. Carrying the balance month to month is hardly a healthy habit and you can solve this worry by making a payment plan before bigger purchases.

Keeping Multiple Credit Cards

Whilst the thought of having a few credit cards is appealing, and they each come with their perks, payment plans, and discount offers, it’s quite a poor idea. Wondering why? Firstly, for the simple reason of having to maintain and make payments for multiple accounts. Secondly, imagine the interest each card accumulates and now multiply that by the number of cards you are keeping or would like to apply for. Keeping credit cards only costs an annual fee which is mostly minimal but not only will your total bills take a hit, but you will also appear suspicious to lenders and when applying for loans, rentals, or even visas.

Do Not Make Late Payments

You heard us: do not make late payments as this is another major credit card mistake that you should never make. The credit score is technically made up of multiple factors but payments are the most important component of your credit history. It is also one of the key factors that lenders, and other officials, take into consideration to gauge whether you are a trustworthy applicant or not. You must be responsible enough to make your payments on time and your payment history is keeping track. One way to tackle this is to create payment plans with your creditors or to enable automatic payments through your account so that you never miss a date.

Withdrawing Cash? Not From Your Credit Card

This is a secret nobody will tell you about but believe us when we say, withdrawing cash from your credit cash is a much worse idea than making late payments or making minimum payments. It’s a common mistake that must absolutely be avoided. The reason it’s called a “credit” card is that it functionally charges more interest than the debit card hence withdrawing cash with your credit card will immediately result in an interest fee. Whatever cash you are taking from your card, you will be paying not only the ATM fees but also an interest rate to your bank, making this a more heavy transaction than you’d have thought.

Know Your Annual Percentage Rate

Annual Percentage Rate (APR) is the rate at which your bank will be deducting charges against different payments and also the fee they will be charging against the allowance of the credit card. When you receive a credit card, a card agreement follows making you a member in agreement with the terms and conditions. It’s a boring read that most of us don’t bother with but the list carries important information about payments that will be charged upon your card, including other account terms. Must know this and avoid making this common mistake that will cost you your hard-earned money.

If we were to list down all possible mistakes, we could go on for a while. But now you know the most common credit card mistakes that you can easily stop making.